Maintain long positions. The COMEX Gold ended the latest session lightly negative. It eased USD1.40 to settle at USD1,228.70, after oscillating between a low and high of USD1,226.20 and USD1,234.10. The latest weak session can be seen as part of ongoing consolidation phase that the commodity is experiencing after it recently broke out from the 50-day SMA line and the prior resistance of USD1,215. Technically, this is a healthy development, as it implies the bulls are staging for the next possible upward move. Based on this, we are keeping our positive trading bias.

As the commodity is experiencing a healthy consolidation above the USD1,215 support mark, we continue to advise traders to keep their long positions. Recall that we initiated these positions after the precious metal breached above the USD1,207.60 mark on 12 Sep. For risk management purposes, a stop-loss can be placed below USD1,215.

Towards the downside, immediate support is set at the USD1,215 mark, or 20 Jul’s low. Breaking this may see the market test USD1,184, which was the low of 24 Aug. On the other hand, the immediate resistance is eyed at the USD1,239 level, which was 26 Jul’s high. This is followed by USD1,272.30, the high of 9 Jul.

Source: RHB Securities Research - 22 Oct 2018